Insurance Letters Went To 'Tiny Fraction' Of Those Who Benefit From Obamacare, Group Says

MATTHEW STURDEVANT, msturdevant@courant.comThe Hartford Courant

The number of people who received letters from health insurers this fall saying their coverage won't be offered next year because of the Affordable Care Act is a "tiny fraction" of the people who will benefit from the law, the nonprofit consumer group Families USA said Thursday.

"That number is a tiny fraction of the 65 million non-elderly people with pre-existing conditions who will gain new protections through the Affordable Care Act," Families USA's Executive Director Ron Pollack said in a prepared statement.

Families USA has long supported the Affordable Care Act, often called Obamacare.

The actual number of people who received letters in Connecticut or across the U.S. isn't clear. There is no clearinghouse to capture that information. It isn't filed with insurance regulators and the only way of knowing would be if the insurers themselves agreed to say how many letters were distributed.

One Connecticut health insurance broker, Alan Sheketoff of Fairfield, told The Courant last month that 1,400 of his 2,300 customers in the individual market across Connecticut received a letter saying their health plan had been discontinued by their insurer because of mandatory changes in the Affordable Care Act. Sheketoff said people in his office call it the "screw you" letter because that's how his clients have characterized it.

At the heart of the problem is the Affordable Care Act requirement that all health insurance plans sold on the individual market have "essential health benefits" starting Jan. 1. That makes the minimum coverage of a health plan more robust that some of the health plans offered on the market today. As a result, insurers mailed letters to people in those health plans to say that their coverage won't be offered next year.

Last week, Obama said he would postpone for one year the essential health benefits requirement.

"Although President Obama was right to express his concern about, and to propose corrective action for, the people at risk of losing health coverage due to the Affordable Care Act, it is important to keep a perspective about the small portion of the population that might be adversely affected," Pollack, the Families USA executive director, said in a statement.

The organization said only 0.6 percent of the non-elderly — people less than Medicare eligibility age of 65 — are at risk of losing individual health-plan coverage and also do not qualify for a federal subsidy available only on public health insurance exchanges, such as Connecticut's Access Health CT.

Families USA estimates that 1.5 million people have policies that don't meet the essential health benefits requirements and they also make too much to get a subsidy, meaning more than 400 percent of the federal poverty level, which is $45,960 for an individual or $94,200 for a family of four. The nonprofit based its analyses on data from the U.S. Census Bureau's Current Population Survey, the Urban Institute, the Kaiser Commission on Medicaid and the Uninsured and the State Health Access Data Assistance Center.

What the Families USA study does not account for is the fewer options available to people. Some of the complaints about discontinued coverage in Connecticut have been from professionals who choose low-premium, high-deductible plans which have less expensive premiums than even some subsidized health plans on the exchange. Several insurers have said they like the idea of preserving a wide array of options for consumers. And some insurers circumvented the essential health benefits by allowing people to renew early for a 12-month health policy, thereby avoiding rules that kick in on Jan. 1.

The "essential health benefits" provision of the Affordable Care Act is one of many parts of the law, as is "guaranteed issue," a separate provision requiring insurers to accept patients even if they have a pre-existing medical condition.

After President Obama reversed course last week, when he said insurers could continue offering plans that don't meet the essential health benefits, a trade group for health insurers reacted. America's Health Insurance Plans said changing the rules after health plans have already met requirements of the law could destabilize the market and result in higher premiums for consumers.

America's Health Insurance Plans' President and CEO Karen Ignagni said in a statement last week: "The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today."